The renin-angiotensin system is a major physiological regulator of body fluid volume, electrolyte balance, and arterial pressure. Virtually all of the biological actions of the principle effector peptide angiotensin II (ANG II) have been attributed to an action at the type 1 (AT(1)) ANG receptor. Until recently, the functional role of the type 2 (AT(2)) receptor, if any, has been unknown, possibly because the AT(2) receptor has a low degree of expression compared with that of the AT(1) receptor. Evidence has now accumulated that the AT(2) receptor opposes functions mediated by the AT(1) receptor. Whereas the AT(1) receptor stimulates cell proliferation, the AT(2) receptor inhibits proliferation and promotes cell differentiation. These differences in growth responses have been ascribed to different cell signaling pathways in which the AT(1) receptor stimulates protein phosphorylation and the AT(2) receptor dephosphorylation. During the past 5 years, studies have demonstrated that the AT(2) receptor is responsible for vasodilation and natriuresis, thus opposing the vasoconstrictor and antinatriuretic effects of ANG II mediated through the AT(1) receptor. Work from our laboratory and others indicates that the AT(2) receptor stimulates vasodilation and natriuresis by an autocrine cascade including bradykinin, nitric oxide, and cyclic GMP. The AT(2) receptor also has been found to control vasodilator prostaglandins, which have a role in blood pressure regulation. The AT(2) receptor appears to play a counterregulatory protective role in the regulation of blood pressure and sodium excretion that opposes the AT(1) receptor.